<PAGE>
UNITED STATES
SECURITIES AND EXHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ---- to ----
Commission File Number: 0-8149
SOUTHWEST CAPITAL CORPORATION
- -----------------------------------------------------------------------------
(Name of small business issuer in its charter)
New Mexico 85-1069650
- -----------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1650 University Blvd., N.E., Suite 5-100
Albuquerque, New Mexico 87102
- -----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (505)243-4949
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
No Par Value Common Stock
-----------------------------
(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No [ ].
Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of Registrant's knowledge, in definitive proxy or <PAGE>
information statements
incorporated by reference in Part III of this Form 10- KSB or any amendment to
this Form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year. $ -0-
The number of shares of the Registrant's common stock outstanding as of March
15,2000 was approximately 1,569,000. The aggregate market value of the
Registrant's common stock held by non-affiliates as of March 15, 2000 was
$1,143,000.
DOCUMENTS INCORPORATED BY REFERENCE
None
<PAGE>
PART I
ITEM 1: DESCRIPTION OF BUSINESS.
Southwest Capital Corporation, incorporated in 1964 under the laws of the State
of New Mexico, and subsidiary is hereinafter referred to as the "Registrant" or
the "Company".
The Company's principal offices are located at 1650 University Boulevard, N.E.,
Suite 5-100, Albuquerque, New Mexico 87102, and its telephone number at that
location is (505)243-4949.
Company's Historic Development.
The Company was originally formed as a provider of financial services to small
businesses.
From 1976 to 1989 such operations were performed by a wholly owned subsidiary,
Southwest Capital Investments, Inc. ("SCII"), which was licensed by the Small
Business Administration ("SBA"). As a result of declines in income and assets,
the Company was determined to have a capital deficiency by the SBA in April
1989. As the Company was unable to secure additional capital for the SBA
program, management determined it was in the best interest of the Company to
divest itself of such operations and acquire a new line of business.
In 1990, the Company accepted an offer from its President at the time, to
exchange 125,000 shares of Company stock for all the issued and outstanding
shares of SCII.
In 1989, the Company acquired all of the issued and outstanding common stock of
Beef Technologies, Inc. ("BTI"), a New Mexico corporation. BTI was organized, to
exploit certain technology and business plans related to the production and
marketing of lean, low cholesterol beef. Following an unsuccessful pilot in
1992, this project was abandoned.
As a result of these events, the Company has been without operations since 1992.
Current management has actively solicited and pursued investment possibilities
in the form of acquisitions of privately held businesses. To date, several
companies have been analyzed for potential acquisition; however, no firm
candidates exist at this time.
ITEM 2: DESCRIPTION OF PROPOERTY.
The Registrant utilizes office space at 1650 University Boulevard, N.E.,
Albuquerque, New Mexico 87102. The space utilized by the Registrant is
negligible and it pays no rent for its use.
ITEM 3: LEGAL PROCEEDINGS.
Management of the Company is not aware of any legal or administrative actions
now pending or contemplated against the Company.
<PAGE>
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted during the fourth quarter of the 1999 fiscal year to a
vote of security holders, through solicitation of proxies or otherwise.
PART II
ITEM 5: MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Registrant's common stock has been listed in the National Daily Quotation
Bureau, Inc. in its Pink Sheets and the OTC Bulletin Board under the symbol
SWCC. The following table sets forth for the periods indicated, the high and low
bid prices as reported.
1999 1998
----------------- ----------------
High Low High Low
------- -------- ------- -------
First quarter $ 0.31 $ 0.25 $ 1.50 $ 1.38
Second quarter 0.25 0.25 1.00 0.75
Third quarter 0.25 0.25 0.75 0.31
Fourth quarter 0.25 0.25 0.31 0.25
There were approximately 900 holders of the Company's common stock on December
31, 1999. The Company has not paid dividends on its common stock for more than
the past five years, including the fiscal year ended December 31, 1999.
ITEM 6: MANAGEMENT'S DISCUSSION AND ANALSIS OR PLAN OF OPERATIONS.
Plan of Operations
As the Company has not had revenues from operations in each of the last two
fiscal years, the following represents management's plan of operations for the
next twelve months.
The Company is presently without revenues or cash flow from operations. Based
upon current activity levels, management believes that cash on hand and the
availability of working capital loans from officers are sufficient to meet the
Company's cash requirements for the next twelve months, which are expected to
consist of general and administrative costs incurred to maintain good standing
as a publicly traded company.
The Company currently has no employees and does not anticipate retaining any
employees based upon current activity.
Management will continue to solicit and pursue investment possibilities in the
form of acquisitions of privately held businesses. However, it should be noted,
such management personnel are engaged full time in other activities, endeavors
and professions.
<PAGE>
Year 2000 Issues
Because of the limited activities of the Company, year 2000 issues of the
Company were minimal. The Company has not incurred any year 2000 problems with
its computer hardware and software, financial institutions or professional
service providers, nor does management expect to incur any future problems.
<PAGE>
ITEM 7: FINANCIAL STATEMENTS.
Report of Independent Certified Public Accountants
Stockholders
Southwest Capital Corporation
We have audited the accompanying consolidated balance sheet of Southwest Capital
Corporation and Subsidiary, as of December 31, 1999, and the related
consolidated statements of operations, stockholders' deficit, and cash flows for
each of the two years in the period ended December 31, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Southwest Capital
Corporation and Subsidiary, as of December 31, 1999, and the consolidated
results of their operations and their consolidated cash flows for each of the
two years in the period ended December 31, 1999 in conformity with generally
accepted accounting principles.
GRANT THORNTON LLP
Oklahoma City, Oklahoma
February 22, 2000
<PAGE>
SOUTHWEST CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
December 31, 1999
ASSETS
CURRENT ASSETS
Cash $ 2,184
===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable $ 3,980
Accrued liabilities 9,185
-----------
Total current liabilities 13,165
NOTES PAYABLE TO RELATED PARTIES (note B) 35,879
STOCKHOLDERS' DEFICIT
Common stock - no par value; authorized,
10,000,000 shares; issued and outstanding,
1,568,791 shares 1,568,791
Additional paid-in capital 1,659,054
Accumulated deficit (3,274,705)
-----------
(46,860)
-----------
$ 2,184
===========
The accompanying notes are an integral part of this statement.
<PAGE>
SOUTHWEST CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended December 31,
1999 1998
---------- ----------
Expenses
General and administrative $ 8,603 $ 5,206
Interest 3,024 2,675
---------- ----------
NET LOSS $ (11,627) $ (7,881)
========== ==========
Net loss per common share $ (.01) $ (.01)
========== ==========
Weighted average common shares outstanding 1,568,791 1,568,791
========== ==========
The accompanying notes are an integral part of these statements.
<PAGE>
SOUTHWEST CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
Years ended December 31, 1999 and 1998
Common stock Additional
-------------------- paid-in Accumulated
Shares Amount capital deficit Total
--------- ---------- ---------- ----------- --------
Balance at
January 1, 1998 1,568,791 $1,568,791 $1,659,054 $(3,255,197) $(27,352)
Net loss - - - (7,881) (7,881)
--------- ---------- ---------- ----------- --------
Balance at
December 31, 1998 1,568,791 1,568,791 1,659,054 (3,263,078) (35,233)
Net loss - - - (11,627) (11,627)
--------- ---------- ---------- ----------- --------
Balance at
December 31, 1999 1,568,791 $1,568,791 $1,659,054 $(3,274,705) $(46,860)
========= ========== ========== =========== ========
The accompanying notes are an integral part of this statement.
<PAGE>
SOUTHWEST CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended December 31,
1999 1998
---------- ----------
Cash flows from operating activities
Net loss $ (11,627) $ (7,881)
Adjustments to reconcile net loss to net cash
used in operating activities
Changes in operating assets and liabilities
Increase in accounts payable and
accrued liabilities 4,301 2,675
---------- ----------
Net cash used in operating activities (7,326) (5,206)
Cash flows from financing activities
Proceeds from notes payable 6,379 5,500
---------- ----------
NET INCREASE (DECREASE) IN CASH (947) 294
Cash at beginning of year 3,131 2,837
---------- ----------
Cash at end of year $ 2,184 $ 3,131
========== ==========
The accompanying notes are an integral part of these statements.
<PAGE>
SOUTHWEST CAPITAL CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999 and 1998
NOTE A - NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES
Southwest Capital Corporation and Subsidiary (the "Company"), a New Mexico
corporation, acts primarily as a holding company and has had no business
operations since 1992. At December 31, 1999, the Company's activities generally
consist of paying general and administrative costs of the Company.
At present, the Company has no employees and is wholly dependent on the personal
efforts of its officers and directors who are engaged full-time in other
activities, endeavors, and professions.
A summary of the significant accounting policies consistently applied in the
preparation of the accompanying consolidated financial statements follows.
1. Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
its wholly-owned inactive subsidiary, Beef Technologies, Inc. All significant
intercompany transactions and balances have been eliminated.
2. Loss Per Share
Basic loss per share has been computed using the weighted average number of
common shares outstanding during each period. Diluted loss per share is the same
as basic loss per share because the Company has only common stock outstanding.
3. Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes;
accordingly, actual results could differ from those estimates.
NOTE B - NOTES PAYABLE TO RELATED PARTIES
Notes payable to related parties are comprised of two uncollateralized notes
($30,879 and $5,000) bearing interest at 10%, due to two individuals who are
major stockholders of the Company. One of these individuals is also an officer
and a director. The notes have no specified payment terms but are not callable
until after December 31, 2000.
NOTE C - INCOME TAXES
Income taxes are accounted for under Statement of Financial Accounting Standards
("SFAS") No. 109, Accounting for Income Taxes. Under this method, deferred
income taxes are recognized for the tax consequences of temporary differences
between the financial statement carrying amounts and the tax bases of existing
assets and liabilities using the presently enacted tax rates.
<PAGE>
The Company files a consolidated income tax return. Net operating losses,
subject to certain limitations, are available to offset future taxable income
and income taxes payable, if any.
At December 31, 1999, the Company had deferred tax assets related to net
operating loss carryforwards of approximately $138,000. The deferred tax assets
have been completely eliminated through a valuation allowance as the Company
cannot currently conclude that it is more likely than not that the benefit will
be realized. The valuation allowance for tax assets increased $4,000 for each of
the years ended December 31, 1999 and 1998.
At December 31, 1999, the Company's net operating loss carryforwards are as
follows:
Expiration date
2000 $ 30,000
2001 47,000
2002 38,000
2004 17,000
2005 16,000
2006 23,000
2007 74,000
2008 42,000
2009 12,000
2010 9,000
2011 9,000
2012 13,000
2018 8,000
2019 12,000
---------
$ 350,000
=========
NOTE D - FINANCIAL INSTRUMENTS
The following table includes various estimated fair value information as of
December 31, 1999 as required by SFAS No. 107, Disclosures About Fair Value of
Financial Instruments. Such information, which pertains to the Company's
financial instruments, is based on the requirements set forth in SFAS No. 107
and does not purport to represent the aggregate net fair value of the Company.
The carrying amounts in the table below are the amounts at which the financial
instruments are reported in the consolidated financial statements.
All of the Company's financial instruments are held for purposes other than
trading.
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate that
value: <PAGE>
1. Cash
The carrying amount approximates fair value because of the short maturity and
highly liquid nature of those instruments.
2. Notes Payable
These amounts have no fixed maturities and it is not practicable to estimate
fair value.
The carrying amounts and estimated fair values of the Company's financial
instruments, as of December 31, 1999, are as follows:
Carrying Estimated
amount fair value
---------- ----------
Financial asset
Cash $ 2,184 $ 2,184
Financial liabilities
Notes payable for which it is not
practicable to estimate fair value (35,879) -
<PAGE>
ITEM 8: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None
PART III
ITEM 9: DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS,
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
Laurence S. Zipkin, Age 60, serves as President, Chief Executive Officer and a
Director of the Company. Mr. Zipkin is also a Director of Equity Securities
Investment, Inc., a Minneapolis based broker dealer. Equity Securities is a
member of the National Association of Security Dealers and employees
approximately forty people. Prior to joining Equity Securities in 1987, Mr.
Zipkin was a principal in a chain of retail stores throughout the mid-west using
the name Flower City. He sold his interst in 1987 when he began his association
with Equity Securities.
Alan Geiwitz, age 49, serves as Vice President, Chief Financial Officer and a
Director of the company. Mr. Geiwitz is a founder and principal of Orion
Financial Corp., and has been actively involved in financial management for over
twenty years. Prior to forming Orion in 1982, Mr. Geiwitz was Vice President and
Manager of a commercial lending division which handled manufacturing,
wholesaling and leasing companies at Norwest Bank, Minnesota, and also worked in
the Loan Administration Division of Norwest Corporation. Mr. Geiwitz sits on the
Boards of Directors of Orion Financial Corp., Midwest Financial Services, Inc.,
Metals Manufacturing Corporation, Griffiths Corporation, Lake Air Metal Products
LLC and Mercury Waste Solutions, Inc. Mr. Geiwitz is a cum laude graduate of
Mankato State University with a double major in Business Administration Finance
and Mathematics.
Alan Geiwitz has served as the
Need to insert the following information for officers and directors:
Positions held
Term of office and the period served Persons business experience Directorships
of other reporting companies Involvement in any legal proceedings
Family relationships
None of the officers or directors of the Company are related (as first cousins
or closer) by blood, marriage or adoption to any other officer or director.
ITEM 10: EXECUTIVE COMPESATION.
None of the Company's Officers or Directors are compensated for the minimal
services which are provided on behalf of the Company.
ITEM 11: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth certain information with respect to the security
ownership of certain beneficial owners and management of the Company's common
stock as of March 15, 2000. Each person has sole voting and investment power as
to all shares unless otherwise indicated.
There were approximately 1,569,000 shares of the Company's common stock issued
and outstanding at March 15, 2000.
Title of Name and Address Amount and Nature of Percent
Class of Beneficial Owner Beneficial Ownership of Class
------------ ------------------------- -------------------- --------
$.01 par James A. Arias (1) 100,000 - Direct 6.4%
common 1650 University Blvd., NE 157,500 - Indirect 10.0%
Suite 5-100
Albuquerque, NM 87102
<PAGE>
$.01 par Realco, Inc. (1) 157,500 - Direct 10.0%
common 1650 University Blvd., NE
Suite 5-100
Albuquerque, NM 87102
$.01 par Nasser J. Kazeminey 250,000 - Direct 15.9%
common 1450 Lincoln Centre
333 South 7th Street
Minneapolis, MN 55402
$.01 par Laurence S. Zipkin 250,000 - Direct 15.9%
common 400 North Lilac Dr.
Golden Valley, MN 55422
$.01 par Alan R. Geiwitz 100,000 - Direct 6.4%
common 7803 Glenroy Road
Bloominton, MN 55469
$.01 par Martin J. Roe 100,385 - Direct 6.4%
common TTEE/TR
1022 Hillcrest Road
Beverly Hill, CA 90210
$.01 par All Executive Officers 350,000 - Direct 22.3%
common and Directors as a
group
- ---------------------------------
Note to Beneficial Ownership Table:
1. Mr. Arias is President of Realco, Inc. (a publicly traded company) and as
such, votes these shares.
Changes in Control
There are no arrangements known to the Company, including any pledge of
securities of the Company, which may result in a change in control of the
Company at a subsequent date.
ITEM 12: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Mr. Laurence S. Zipkin, the Company's President, Chief Executive Officer and a
Director, has advanced working capital to the Company from time to time. Such
advances totaled $30,879 at December 31, 1999 and are evidenced by 10% interest
bearing demand notes.
Mr. Nasser J. Kazeminey, a major stockholder, has advanced working capital to
the Company. Such advances totaled $5,000 at December 31, 1999 and is also
evidenced by a 10% interest bearing demand note.
ITEM 13: EXHIBITS AND REPORTS ON FORM 8-K.
(a) Documents filed as a part of this report:
(1) The financial statements filed as part of this report are included in
Item 7.
<PAGE>
(2) The following exhibits are filed as part of this report:
3.1 * Articles of Incorporation
3.2 * Bylaws
4 * Instruments defining rights of security holders, including
indentures
10 * Material contracts
21 * Subsidiaries of Registrant
* Filed as an exhibit to the Registrant's Form 10 Registration Statement under
the Securities Exchange Act of 1934, and incorporated herein by reference.
(b) Reports on Form 8-K:
The Registrant filed no reports on Form 8-K during the last quarter of the
period covered by this Report.
<PAGE>
SIGNATURES:
In accordance with Section 13 or l5(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
SOUTHWEST CAPITAL CORPORATION
Date: March 29, 2000 By: /s/ LAURENCE S. ZIPKIN
-----------------------------
Laurence S. Zipkin, President
and Chief Executive Officer
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dated indicated.
Signature Title Date
------------------------- --------------------------- ---------------
/s/ LAURENCE S. ZIPKIN President, Chief Executive March 29, 2000
------------------------ Officer and Director
Laurence S. Zipkin
/s/ ALAN R. GEIWITZ Vice President, Chief March 29, 2000
------------------------ Financial Officer and
Alan R. Geiwitz Director
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 2,184
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,184
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,184
<CURRENT-LIABILITIES> 13,165
<BONDS> 0
0
0
<COMMON> 1,568,791
<OTHER-SE> (1,615,651)
<TOTAL-LIABILITY-AND-EQUITY> 2,184
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 8,603
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,024
<INCOME-PRETAX> (11,627)
<INCOME-TAX> 0
<INCOME-CONTINUING> (11,627)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (11,627)
<EPS-BASIC> (.01)
<EPS-DILUTED> (.01)
</TABLE>
